New York (HedgeCo.Net) – A Miami-based trader has been caught red handed with insider trading information in a large Chinese company. Charles Raymond Langston III was also caught conducting illegal short sales in the securities of three other companies.

“Langston agreed to keep confidential the information he learned from AutoChina’s placement agent and abstain from trading on it. Yet he chose to place personal greed ahead of the integrity of the securities markets,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.

The SEC alleges that Langston learned confidential information in advance of a public announcement that significantly decreased the value of AutoChina International’s stock. Langston was solicited by placement agents to invest in a secondary offering of AutoChina stock. Despite agreeing to keep information confidential and not trade on it, he promptly sold short 29,000 shares of AutoChina stock in advance of the company’s public announcement that it had completed the secondary offering. To avoid detection, Langston made the trades through an entity he owned using a different broker and different account than he used to purchase shares in AutoChina’s initial offering. Langston made $193,108 in illegal profits by trading on the inside information.

“During restricted periods, Langston and his companies executed short sales that gamed the system and resulted in illegal profits,” said Glenn S. Gordon, associate director for enforcement in the SEC’s Miami Regional Office. “The SEC is resolutely committed to pursuing those who violate Rule 105.”

Langston has agreed to settle the insider trading charges by paying disgorgement of $193,108, prejudgment interest of $22,204, and a penalty of $193,108.